What are best reits to buy and hold?

What Are Best REITs to Buy and Hold: Empowering Strategic Investment in the Face of Fear

Jan 31, 2025

Beware the ravenous tide of collective panic—it lurks in every corner of financial markets, ready to devour portfolios at the faintest shift in sentiment. You might believe you are immune and confident in your research and due diligence, but when fear spreads like wildfire, even the most composed can be tempted to join the herd. Market collapses do not merely destroy paper wealth; they transform once-levelheaded individuals into frantic sellers desperate to salvage positions in a wave of panic. This essay will urge you to resist these impulses. In a world where fear can ravage entire economies, the true winners are those daring enough to view the crisis as an opportunity. By the time you finish reading, you will know how to interpret mass hysteria, how to turn collective dread into strategic leverage, and—crucially—what to watch for when selecting the best REITs to buy and hold despite the din of panic in the background.

The strategy is as old as the markets themselves: look upon fear as the ultimate fire-sale sign. When prices plunge, your blueprint for success should be clarity over confusion and strategic calm over unsettled haste. If you can master this mindset, you stand to benefit not just from a single downturn but from every volatile period that future generations will inevitably endure. Throughout this essay, we will journey through the psychological currents of herd behaviour, exploring both epochal market tragedies and the subtle mental traps that turn perfectly rational investors into terrified sellers. We will illustrate how these dynamics can affect decisions to invest in Real Estate Investment Trusts (REITs), especially the ones that reward patient holders with stable dividends and long-term appreciation. Prepare yourself for a deep dive into contrarian thinking—an approach that, if skillfully managed, can convert volatile episodes into robust wealth-building opportunities.

In the following sections, we will scrutinise the architecture of market panic, highlighting the collective illusions and biases that drive people to sell at exactly the wrong times. We will then shift gears to examine the strategies employed by contrarian investors, those mavericks who thrive in chaos and uncertainty. You will learn about advanced techniques—like selling put options during volatility spikes—that can be used to generate profits even amidst global upheaval. Finally, we will connect these concepts to some of the best REITs to buy and hold, revealing how property-based investments can form a cornerstone of both formidable resilience and consistent long-term cash flow. By the end, expect a fierce call to action, urging you to break free from the herd mentality and chart your own course through market storms.

The Psychology of Fear and Herd Behaviour

At the core of every sharp market downturn lies a potent cocktail of cognitive biases and instinctual responses. Chief among these is loss aversion—the tendency to feel the pain of losses more acutely than the gratification of gains. When this bias collides with the ever-present hum of social proof, chaos can ensue. People scan the behaviour of others for clues on how to act, especially when conditions look grim or when uncertainty reaches a fever pitch. If everyone is selling, it must be the right time to sell—or so the dangerously simplistic logic goes. In reality, this group-think reflex compels individuals to forget their own research, long-term plans, and rational decision-making processes, leading to hurried offloads that intensify the very panic they seek to escape.

Loss aversion is not the only mental trap. Confirmation bias often whispers subtly in the investor’s ear, reinforcing pre-existing fears that the market will collapse further. This subconscious inclination to prioritise evidence that matches our forebodings can magnify a dip in the market, turning it into a psychological catastrophe. Amid the cacophony of collapsing prices, investors scramble for stories that justify their dread, ignoring any data suggesting that prices might stabilise or rebound. Multiply that tendency across millions of market participants, and you have a perfect storm where panic feeds on itself, compounding rapidly, until it seems unstoppable.

The role of modern media and technology amplifies such psychological frailties. Financial headlines thrive on drama—they spotlight bombastic pronouncements from analysts predicting doomsday, emphasise market drops with big, bold numbers, and rarely highlight the subtler narratives of recovery or resilience. Social media further accelerates panic by rewarding viral negativity. A single tweet forecasting a crash can be shared thousands of times, adding another greasy log to the fear fire. Witnessing the collective meltdown of friends, colleagues, and respected commentators can corrode even the hardest-won emotional fortitude.

Historical Lessons from Market Crashes

To comprehend how devastating herd behaviour can be, one need only glance at the tombstones of past market crises. The crash of 1929, which heralded the Great Depression, remains an enduring example of how widespread fear can become self-fulfilling. Back then, the market’s exuberance was built on cheap credit and unbridled optimism, yet as soon as cracks appeared, investors fled en masse, propelling prices into a catastrophic tailspin. The subsequent bear market lasted approximately a decade, delivering a searing lesson on the cost of panic combined with rampant speculation.

Fast forward to 2008, the epochal financial crisis triggered by subprime mortgage defaults and the collapse of major financial institutions. Again, the panic spiralled out of control as banks declared bankruptcy and governments scrambled to stabilise credit markets. Investors were frantic for liquidity, incurring massive losses by selling when prices were at rock bottom. However, those few who remained watchful, methodical, and courageous—as the Oracle of Omaha, Warren Buffett, famously was—recognised depressed prices as bargains. They managed to purchase robust companies for a fraction of their intrinsic value. Years later, those contrarian decisions paid off handsomely.

Even in 2020, ignited by the global pandemic, markets saw some of their most dramatic plummets and recoveries in record time. Within days, entire economies shut down, consumption halted, and fear soared to heights echoing previous crises. Yet, within months, certain sectors rebounded spectacularly, especially those enabled by technology and services that supported a remote-working world. Meanwhile, other areas like travel and entertainment took a battering. Fear, fanned by 24/7 coverage of infection counts and lockdowns, remained a key driver of widespread selling. Those who kept their composure, scouring the rubble for undervalued assets, often earned significant returns, especially once the pace of vaccinations and economic reopenings clarified the path to recovery.

Across these examples, one truth emerges: panic inflicts its cruellest toll on those who capitulate to the psychological assault of frantic headlines and mass hysteria. By preparing emotionally and practically, you can sidestep these missteps. The key is not to ignore fear entirely—after all, it can serve as a warning sign—but rather to harness it as a signal that bargains might be around the corner. In the context of REITs, specifically, plunging share prices often correlate with fleeting sentiment rather than a fundamental deterioration of underlying assets.

Contrarian Courage: Turning Panic into Opportunity

Contrarian thinking hinges on one audacious premise: when the world runs in one direction, turn around and look the other way. It is a classic yet provocative approach that has defined the success of many legendary investors. The contrarian fears fear itself far less than the reversion to normalcy that typically follows automotive panic. While the masses panic, contrarians calmly assess the gap between market price and underlying value, often discovering that fear has created undervalued assets ripe for strategic entry.

This mindset requires deep emotional discipline. To be a contrarian, you must tune out the thunderous roar of mainstream headlines shouting “Sell!” and instead keep your eyes locked on the fundamentals. Question everything. Challenge consensus estimates. If the herd is running, ask why and whether they might be overreacting. Proper contrarianism does not demand recklessness; it demands meticulous research, robust valuation models, and psychological fortitude. You acknowledge risk, but you also recognise opportunity in chaos.

One of the most iconic examples arises from Warren Buffett’s oft-quoted maxim: “Be fearful when others are greedy, and greedy when others are fearful.” Throughout market downturns, this principle has guided fearless purchases of companies whose intrinsic value remains intact. Of course, contrarian legends are not made by blindly betting against the crowd, but by patiently awaiting those rare instances when the broader market overcorrects. Hysteria often leads to severe mispricing, offering an opening for bold, long-term bets. In the world of REITs specifically, contrarians keep an eye on widely diversifying sectors—such as retail, industrial, and residential real estate—to identify high-quality trusts that might be temporarily battered by sentiment rather than structural deficiencies. With this approach, your portfolio stands to emerge stronger from crises, reaping the rewards from those discounted shares that eventually correct upward when rationality resurfaces.

Advanced Fear-Harnessing Strategies: Options as Tools

Beyond buying undervalued shares outright, there exists a more sophisticated realm of instruments that allow investors to thrive on volatility. Options, particularly put options, can prove invaluable during episodes of market-wide fear. When panic sets in, implied volatility soars, driving up the premiums on these contracts. Selling puts in these periods can generate hefty income, effectively paying you to be patient and to purchase shares at a lower, predetermined price if the market continues to plummet.

Imagine, for instance, that a quality REIT—like those specialising in industrial warehouses—trades at what you believe is a bargain. The market, hammered by meltdown sentiment, drives the share price further downward while the put option premiums soar. By selling put options, you commit to buying the stock at the strike price if exercised. In return, you collect a premium. If the market recovers, you keep the premium without having to buy the shares. If the market continues its descent, you can purchase the shares at an even cheaper price, effectively discounting your overall cost basis. This approach exploits fear: other investors, driven by dread, are willing to pay more for put options to hedge their risk. Contrarian traders capitalise on this inclination, profiting from the very phenomenon that spooks most people into selling.

An extension of this strategy involves using put premiums to finance the purchase of LEAPS (Long-Term Equity Anticipation Securities). LEAPS are long-dated call options, providing leverage on potential rebounds in the underlying stock’s price over an extended period—sometimes one to three years. By harnessing the elevated option premiums from high volatility, you can accumulate capital that offsets the cost of buying LEAPS on undervalued REITs or other assets. In essence, this synergistic strategy enables you to profit from both ends of the fear spectrum: first, by collecting income from jittery sellers, and second, by riding an eventual recovery wave through call options.

Yet, such tactics are not without risk. You must thoroughly analyse the fundamentals of your targeted asset. Use strict guidelines for the strike prices and maturities you are comfortable with. Options strategies magnify your exposure, so a disciplined approach to position sizing and capital allocation is paramount. Still, for the trader or investor with a robust research process and a willingness to endure short-term volatility, options can turn panic into profit—a powerful illustration of how fear can be harnessed rather than feared.

Best REITs to Buy and Hold: Identifying Value in Uncertain Times

Now we reach the essence of the question: what are the best REITs to buy and hold when everyone else is running for the exits? The answer is multifaceted, hinging partly on one’s investment horizon and partly on macroeconomic forces. However, a few guiding principles can help light the way. First, examine the quality of the underlying assets. REITs that invest in prime locations—whether it be central business district office buildings, strategically placed industrial warehouses, or data centres crucial to modern infrastructure—tend to weather market storms better, rebounding strongly once the panic subsides.

Secondly, scrutinise the trust’s balance sheet. In periods of turmoil, liquidity becomes king, and heavily indebted REITs suffer disproportionately if tenants default or if refinancing becomes expensive. Look for trusts with moderate leverage, diverse tenant bases, and strong occupancy rates. These signals often indicate the trust can handle short-term market dips without compromising distribution payouts. An industrial REIT such as Prologis, with its robust global footprint in logistics and e-commerce, has historically proven resilient during disruptive cycles. Meanwhile, a retail-focused REIT with outmoded properties in declining locations may falter if shopping habits shift further online.

Thirdly, keep an eye on track records. REITs that have consistently raised dividends, even in tough economic climates, supply strong evidence of prudent management and a stable contract base. They might trade at depressed price levels during a sell-off, but the underlying fundamentals—ranging from occupancy rates to lease durations—remain solid. Finally, factor in macroeconomic trends. Demand for data storage is unlikely to vanish, suggesting data-centre REITs like Equinix or Digital Realty may continue thriving despite jitters. Residential REITs focusing on prime apartment locations remain essential for people needing accommodation, even if consumer confidence takes a hit. Rather than following the herd and offloading positions out of fear, contrarian investors see such REITs as opportunities to lock in relatively high yields while waiting for public sentiment to turn more optimistic.

In sum, the terms “best REITs to buy and hold” do not merely label a set of names but rather characterise a collection of attributes—sound balance sheets, enduring tenant demand, robust management, and a track record of weathering storms. Panicked markets might offer these top-tier trusts at a discount—an invitation for the strategically minded to secure an income stream that can outlast any temporary market meltdown. Yet, achieving this requires more than basic knowledge; it demands courage, conviction, and the tools to seize opportunity under duress.

Discipline, Risk Management, and Contrarian Triumph

Contrarian investing may be a powerful strategy, but it is not a reckless dive into the unknown. Discipline and risk management form the bedrock of success. You could spot an underpriced REIT with an enviable portfolio of prime properties, but if you overcommit, rely on margin, or fail to plan for worst-case scenarios, you risk compounding your losses if the downturn lingers. Seasoned contrarians approach each trade or investment with well-defined entry and exit criteria, knowing precisely how much capital they can stand to lose if their thesis proves premature.

Position sizing, diversification, and liquidity reserves all factor into this discipline. You might set aside a portion of capital specifically for opportunistic forays into battered sectors, including REITs, as markets plummet. Meanwhile, your core long-term holdings remain intact, ensuring stability should the rebound take longer than anticipated. Stop-losses or alerts can provide a safety net, albeit contrarian approaches often require flexibility, recognising that overreacting to short-term volatility can inadvertently lock in losses. Instead of using tight stop-losses, you might adopt a trailing mechanism that allows room for normal price fluctuations.

Emotional regulation is paramount. Achieving contrarian triumph demands a mindset steeped in rational analysis and emotional fortitude. Market mania triggers a survival instinct that is hardwired into human psychology. To transcend it, pre-plan your responses to market calamities: outline specific triggers for buying into a position, define the maximum drawdown you can tolerate, and practise mentally separating short-term losses from permanent capital destruction. Having a strategic plan in place makes it easier to carry on methodically while others lose their heads, fueling your advantage. Indeed, it is not a coincidence that contrarian investing is both mentally taxing and financially rewarding—it honours those who discipline themselves to keep logic in command, even while the market broadcasts chaos.

Risk management also involves evaluating the sustainability of dividends in REITs. During market turmoil, some trusts may be forced to cut or suspend payouts if their tenants default or if operational costs skyrocket. By conducting due diligence on each REIT’s underlying leases, operating costs, and cash flow coverage, you mitigate the chance of a dividend cut that can drive share prices further downward. Thus, the contrarian invests confidently, armed with insights into the likelihood of stable or expanding income streams. This integrated approach makes it possible to outwit fear while safeguarding your financial future.

Empowerment and Vision: Breaking Free from Herd Mentality

Ultimately, conquering fear-driven market behaviour and harnessing it for personal gain is not solely a technique—it is a transformative journey. By refusing to be swayed by news cycles that thrive on anxiety, you attribute greater weight to your own analysis and long-term vision. Viewing panic as an opportunity forces you to question assumptions, disregard sensationalist narratives, and trust in diligent, methodical research. As you refine this skill, you liberate yourself from the tyranny of external opinion, learning to navigate turbulence with a steady hand and a discerning eye.

This sense of empowerment resonates beyond the confines of finance. The lessons gleaned from contrarian thinking, risk management, and emotional discipline can be applied to entrepreneurship, leadership, and personal growth. By refusing to capitulate when faced with adversity, you build resilience and a unique perspective that stands apart from the crowd. Soon, you discover that market downturns are little more than cyclical phenomena—opportunities to buy assets at a discount, provided you have the knowledge and composure to act decisively. When most people surrender to fear, you stand firmly, shielded by your systematic approach and unyielding focus on fundamentals.

As we have explored, REITs represent an area of the market where contrarian strategies can shine. Real estate, after all, spans our physical world—properties do not vanish during panics; they remain tangible, income-generating assets. Some of the best REITs to buy and hold are those with a strategic edge (in location or tenant mix), financially conservative management, and a history of rewarding shareholders, even in tumultuous times. Tapping into these during market fear allows an investor to accumulate assets at a fraction of their usual value. Over time, as collective panic dissipates, property valuations recover, distributions resume, and you reap the benefits of a contrarian stance taken in the bleakest hour.

So, let this essay serve as your rallying cry: do not be a victim of herd behaviour, do not capitulate at the first sign of trouble, and do not relinquish your hard-earned wealth to mass hysteria. Instead, adopt a disciplined approach to seizing bargains, whether by straightforward share purchases or through the more nuanced realm of options strategies. Recognise that the best REITs to buy and hold thrive beyond the tumult, benefiting patient investors who see beyond transient market anxiety. Through contrarian courage, you not only protect your capital from the ravages of irrational sell-offs but also turn every surge of panic into a potent chance for profit and lasting wealth. The future belongs to those who dare to stand apart when the crowd is scrambling en masse, and with the right toolkit, that can be you.

Now is the time to discard the shackles of herd thinking. In the face of red charts and dire headlines, channel your self-doubt into an ironclad resolution to follow well-researched convictions. Prepare methodically, visualise the opportunities hidden in the turbulence, and position yourself to flourish instead of flee. Fear can be debilitating, but it can also be your greatest ally if you meet it with reason, preparation, and an unwavering spirit. The market storms will come and go, but your conviction and strategy—grounded in contrarian principles—will endure, granting you the unwavering confidence to buy low when the herd is in disarray and reap the rewards when reason returns.